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CIRCULAR No

CIRCULAR No. 05/1999/TT-TCHQ OF JULY 26, 1999 GUIDING THE IMPLEMENTATION OF DECREE No. 16/CP OF MARCH 20, 1996 AND DECREE No. 54/1998/ND-CP OF JULY 21, 1998 OF THE GOVERNMENT ON SANCTIONS AGAINST ADMINISTRATIVE VIOLATIONS IN THE FIELD OF STATE MANAGEMENT OVER THE CUSTOMS

Pursuant to Clause 2, Article 35, Decree No. 16/CP of March 20, 1996 and Article 7, Decree No. 54/1998/ND-CP of July 21, 1998 of the Government stipulating sanctions against administrative violations in the field of State management over the customs, the General Department of Customs hereby guides the implementation thereof as follows:

I. GENERAL PROVISIONS

1. The application of sanctions against administrative violations in the field of State management over the customs must be based on Decree No. 16/CP of July 21, 1998 of the Government stipulating sanctions against the administrative violations in the field of State management over the customs (only Articles currently in force) and Decree No. 54/1998/ND-CP of July 21, 1998 amending and supplementing a number of articles of the above-said Decree No. 16/CP (hereafter referred to as the amended Decree No. 16/CP).

2. Administrative violations in the field of State management over the customs are acts of breaching the regulations on the State management over the customs, committed by individuals and/or organizations intentionally or unintentionally, which are not serious enough for penal liability examination, but must be sanctioned for administrative violations in the field of customs as prescribed by law.

3. Individuals and organizations defined in Clause 2, Article 1 of the amended Decree No. 16/CP shall be understood as follows:

a/ The organizations shall include: State bodies, economic organizations, socio-political organizations and social organizations as defined by Vietnamese laws.

b/ The individuals shall include Vietnamese nationals, foreigners and stateless people, who have full act capacity according to the provisions of Vietnamese laws.

c/ Vietnamese and foreign individuals and organizations violating the customs State management regulations must all bear the customs-related administrative liability as prescribed by the amended Decree No. 16/CP and other Decrees of the Government defining sanctioning competence of the customs authorities, except otherwise provided for by the international agreements which Vietnam has signed or acceded to.

4. Subject to sanctions against administrative violations in the field of State management over the customs shall be the goods carriers, consignors, consignees or their lawful representatives, bonded warehouse dealers, who have committed acts of customs-related administrative violations; buyers, sellers, storers or transporters of illegally imported goods and articles; unlawful traders of goods eligible for tax preferences; persons obstructing and/or insulting customs officers on official duty.

5. An act of administrative violation is sanctioned only once. If many persons commit the same act of administrative violation, each of the violators shall be sanctioned separately. A person committing many acts of administrative violation shall be sanctioned for every act of violation. When a pecuniary fine is decided against a person for his/her many acts of administrative violation committed simultaneously at a time, the total fine amount shall be made, but the fine amount for each act must be clearly inscribed. If one of the above-mentioned violation acts falls outside their sanctioning competence, the entire dossiers and material evidence thereof shall be transferred to the competent level for sanctioning.

6. For complicated violations with difficulties to determine whether they are administrative violations or criminal offenses, the persons with sanctioning competence in the Customs Departments of the provinces or centrally-run cities (hereafter referred to as the provincial Customs Departments) shall consult with the People�s Procuracy of the same level and issue administrative- sanction decisions only after obtaining opinions of the People�s Procuracy.

7. For export and import commodities and articles being material evidences of administrative violations, which are subject to taxes, in addition to fines, the violating individuals and/or organizations shall have to pay export tax, import tax, other taxes and customs fees as prescribed by law.

8. Acts of customs-related administrative violations defined in the amended Decree No. 16/CP, which coincide with acts of administrative violations defined in other Decrees promulgated subsequently with the determination of sanctioning competence of the customs authorities, shall be handled according to the provisions of the document issued last.

Where the new legal document with the same legal value prescribes lighter legal liabilities or the customs-related administrative violations committed before the effective date of the document, the newly promulgated document shall apply according to the principle of benefit for the involved parties as defined in Clause 1, Article 5b of the amended Decree 16/CP.

9. Regarding the competence to handle violations:

a/ For the administrative violations which fall under the sanctioning competence of many agencies, the agency that has detected them and made records thereon first shall issue the sanctioning decisions.

b/ For acts of falsification of taxes (including export tax, import tax, value added tax, special consumption tax), which are not serious enough to be examined for penal liability according to the provisions of Joint Circular No. 06/TTLT of September 20, 1996 of the Supreme People�s Procuracy, the Supreme People�s Court and the Ministry of the Interior and which are detected by other bodies without sanctioning competence, all the dossiers and material evidences thereof shall be handed over to the customs authorities for issuing sanctioning decisions and collecting taxes according to the provisions of law.

c/ For violations of customs legislation, which are serious enough to be examined for penal liability but do not fall under the customs authorities� competence, the customs authorities shall transfer the dossiers thereon to the competent judicial bodies as well as the material evidences thereto for preservation according to provisions in Clause 2, Article 57 of the Criminal Procedures Code, except for special cases otherwise directed by the Prime Minister.

d/ For administrative violations on which the dossiers involve many customs units, the unit which has detected them and made records thereon first shall issue sanctioning decisions; the relevant units shall have to transfer all the necessary documents at the request of the unit with sanctioning competence; when there appears divergence of opinions on the sanctioning, it must, within the prescribed time limit, be reported to the General Director of Customs for comments.

e/ For customs-related administrative violations involving arrests and seizures on the sea, this principle shall also apply. Where the pecuniary fine amount goes beyond the competence of the seizing unit, the case shall be handed to the nearest customs office for sanctioning.

Where a case initiated according to criminal procedures by the Anti-Smuggling and Investigation Department or central-level investigation body is related to the operations of many provincial/municipal Customs Departments, when there is the decision to suspend the investigation for administrative sanction, it shall be transferred to the provincial/municipal Customs Department in the locality where the case took place for sanctioning. Where the case occurred at a place outside the operation area of the customs, it shall be transferred to the Customs Department near the place where the case happened or the Customs Department with its head office being located in the same area where the investigation body or the Anti-Smuggling and Investigation Department is headquartered, for sanctioning.

10. Upon detection of any customs-related administrative violation in export processing zones or export processing enterprises, depending on the nature and seriousness of the violation, sanctions shall be imposed correspondingly to acts of violation prescribed in the amended Decree No. 16/CP and other Decrees which specify acts of violations and the sanctioning competence of the customs authorities.

11. Cases where customs-related administrative violations shall not be sanctioned: commodities, articles and transport means introduced into Vietnam have been hit by fires, natural disasters, acts of sabotage, unexpected incidents, emergencies, which have been declared with the customs authorities, other competent bodies or local administration according to the provisions of law.

Where they have not been declared, sanctions shall be imposed according to the provisions at Point a, Clause 2, Article 6 of the amended Decree No.16/CP.

12. In this Circular, the following terms and expressions shall be construed as follows:

a/ "Commodities, articles" mean commodities, luggage, postal matters and parcels, foreign exchange, Vietnamese currency and other articles.

b/ "Commodity code" means the tax code under the provisions of legislation on export and import taxes.

c/ "Commodities encouraged for export, import" mean goods exported or imported without control by quotas, permits or oriented plans.

d/ "The average of the pecuniary fine bracket" is the average of the maximum fine level and the minimum fine level of the fine bracket for an act of administrative violation.

e/ "Non-compatibility with the customs declaration" means the disparity between goods and/or articles declared with the customs and goods and/or articles actually exported and/or imported.

f/ "Recidivism" means a case where the violation was already sanctioned but the statute of limitations for it to be considered as being not yet sanctioned for administrative violation has not expired while the administrative violation continues to be committed in such field.

g/ "Repeated violation" means the case where an administrative violation is committed in the field where the violation was committed earlier but not yet sanctioned.

h/ "Illegally introducing goods into Vietnam" means an act of introducing goods into Vietnam in contravention of the provisions of Vietnamese laws.

13. When receiving customs dossiers for clearance of procedures for export/import of goods and/or articles, the dossiers-receiving officials shall have to check them; if the dossiers are incomplete under the regulations, the declarers shall be guided to supplement them and submit and produce additional papers; when the dossiers are fully supplemented within the time limit prescribed for filling in the customs procedures, the customs authorities shall receive the registration and not make record of the violation.

II. APPLICABLE FORMS AND LEVELS OF SANCTION

1. Sanctioning forms: Individuals and organizations committing acts of administrative violation regarding the customs shall be subject to one of the main sanctioning forms: warning or pecuniary fine.

a/ Warning: shall be applicable to individuals and organizations that commit minor administrative violations for the first time, which involve extenuating circumstances, as prescribed in Clause 1 of Articles 6, 8, 9a, 9b, 11 and Article 10 of the amended Decree No. 16/CP.

b/ In addition to the main sanctioning forms, the violating individuals and organizations may, depending on the nature and seriousness of their violations, be subject to the following additional sanctioning forms:

- Confiscation of material evidence and violating means;

- Stripping off the right to use licenses.

The above-mentioned additional sanctioning forms must not be applied independently but must be applied together with the main sanctioning forms.

2. Individuals and organizations subject to the above-mentioned main and additional sanctioning forms may still also be subject to other administrative measures prescribed in the amended Decree No. 16/ND such as:

- Forced re-export of commodities and/or articles;

- Suspension of customs procedures filling;

- Forced destruction of commodities and/or articles;

Other administrative measures shall be applied together with main sanctioning forms, but not independently.

3. The additional sanctioning form of "stripping off the right to use the license" shall apply only to licenses directly related to goods, articles and/or transport means, which are material evidences of the violation.

Customs authorities at different levels with the sanctioning competence may only strip the right to use the licenses granted by the customs agencies at all levels. Where a license is granted by other body, the customs authority shall send a written notice to the competent licensing agency, requesting the deprivation of the right to use such license; after meeting the request of the customs authority, the competent licensing agency shall inform the former of the results.

Upon detecting any counterfeit licenses or licenses granted ultra vires or containing illegal details, the record must be made to seize such licenses, then a written notification thereof shall be sent to the concerned State bodies and organizations.

4. When considering and handling cases of mistake in the process of delivering export/import goods and articles prescribed in Clause 3, Article 1 of the amended Decree No. 16/CP, the customs authorities shall have to base themselves on Article 17 of the Ordinance on Customs and Article 7 of Decree No. 16/1999/ND-CP of March 27, 1999 to determine the time of "customs inspection of goods". The "pre-customs inspection of goods" time defined in Clause 3, Article 1, the amended Decree No. 16/CP shall be understood as the time before the customs procedures fillers or their lawful representatives produce and open the goods containers or packages at the inspection places for the customs authorities to inspect them.

The notification of the mistakes must be made in writing by the goods carriers, consignors or their lawful representatives, clearly stating the reasons therefor and send it to the customs authorities before the goods inspection. Where there are enough legal grounds to determine that the violations are committed due to the collusion between the buyer and the seller or the carrier for smuggling, illegal transportation or tax evasion, the customs authority shall refuse to accept the mistake notification but handle the violations according to law, depending on their nature and seriousness.

5. The time-limit prescribed for carrying out the customs procedures mentioned at Clause 1 and Point a, Clause 2, Article 6 of the amended Decree No. 16/CP is the time-limit defined in Article 5, Decree No. 16/1999/ND-CP of March 27, 1999 of the Government defining the customs procedures, supervision and fees.

6. For acts of violation defined at Point b, Clause 2, Article 6 of the amended Decree No. 16/CP, sanctions shall be imposed only if the licenses, the customs declarations or other papers prescribed by law stipulate the time for re-import or re-export.

7. For acts of violations defined in Clause 3, Article 7 of the amended Decree No. 16/CP, if the goods and/or articles being material evidences of other administrative violations which are subject to the additional sanctioning form of confiscating them for public fund, are consumed without permission the sanction defined in Clause 3, Article 7, shall apply and the sum of money equivalent to the value of such goods and/or articles must be recovered. In case of necessity to ensure the enforcement of the sanctioning decision, the sum of money equivalent to the sum of fine shall be recovered.

8. Subjects violating regulations on exchange of export/import goods by border residents include residents in the border areas and outside the border areas. The value and type of goods to be used for exchange by the border residents shall have to comply with the current law provisions. If it is otherwise provided for by an international agreement on exchange of goods by border residents between Vietnam and a bordering country, such international agreement shall apply.

The export and import of goods and articles in other forms at land border-gates must fully comply with the provisions of the customs legislation and relevant laws.

Where a border resident brings across the border foreign exchange (including Vietnamese currency, international-standard gold) in excess of the amount prescribed by the State Bank of Vietnam without making declaration thereof to the custom authority, he/she shall be sanctioned according to Articles 13 and 14 of the amended Decree No. 16/CP with the handling thereof guided in Points 19 and 20, Part II of this Circular.

9. Acts of exporting/importing gifts in contravention of the State�s regulations on export and import prescribed in Clause 2, Article 9a, of the amended Decree No. 16/CP mean acts of exporting/importing goods and/or articles subject to the management by quotas, permits or oriented plans; goods temporarily suspended from export/import; goods and articles banned from export/import or subject to conditional export/import.

Where the actual goods or articles (gifts), when checked, are compatible with the customs declaration but rejected by the recipients or where the imported gifts are on the list of goods banned from import (excluding narcotics, documents with reactionary contents, weapons, ammunition, explosives, military equipment), which have been declared with the customs, the recipients of such gifts shall have to request the consignors, the carriers to take such articles, goods out of the Vietnamese territory within the time-limit prescribed in Clause 2, Article 27 of the amended Decree No. 16/CP; past that time-limit, if the goods, articles are not taken out of Vietnam, they shall be either confiscated for public fund or destroyed.

10. For cases of exporting/importing luggage without making declarations or making declarations not in accordance with the provisions on customs declaration (the provisions in the content of the customs declaration form) other than the provisions in Clause 2, Article 9b of the amended Decree No. 16/CP, the sanction shall comply with Clause 1 of this Article.

The violations of the regulations on export/import of cultural products which are not of gift or luggage nature shall be handled according to Article 12, Decree No. 88/CP of December 14,1995 of the Government stipulating sanctions against the administrative violations in cultural activities, cultural services as well as the prevention of and combat against a number of social vices.

Where export/import goods and articles in luggage fall into the category of goods banned from export/import (excluding narcotics, documents with reactionary contents, weapons, ammunition, explosives, military equipment) and have been declared with the customs, the export/import thereof shall not be allowed, but no sanction shall be imposed.

11. Transport means carrying export/import goods, goods on transit, goods on cross-border transshipment defined in the amended Decree No. 16/CP shall include air, sea, river and land transport means moving in the customs- controlled regions.

a/ Acts of violating the provisions in Clause 2, Article 11 of the amended Decree No. 16 shall also include the carrying by transport means of export goods from a departure port of Vietnam or the carrying of transshipment goods to a port outside the ship�s itinerary, but without customs declaration as provided for in Article 5 of Decree No. 16/1999/ND-CP of March 27, 1999.

b/ Undeclared goods and articles on transport means leaving or entering the customs-controlled areas, which are not under the ownership of the crew members shall be handled according to the provisions in Clause 4, Article 11 of the amended Decree No. 16/CP. Where there are enough legal grounds to determine that such goods are owned by the operators, attendants or passengers on board of the departing or entering transport means in service of their journeys or the goods are within the crew members� luggage quotas, the sanction shall comply with Article 9b of the amended Decree No. 16/CP.

c/ When goods and/or articles are detected having been purchased, sold, concealed and/or transported in contravention of law or having originated from illegal import, the sanctioning levels shall comply with the provisions at Point b, Clause 3, Article 17; Article 21 of Decree No. 01/CP of January 3, 1996 on sanctions against administrative violations in the field of commerce; or Clause 4, Article 11 and Clause 2, Article 17 of the amended Decree No. 16/CP, depending on the nature and seriousness of the violations; if acts of tax evasion are committed, they shall be handled according to Point 12.a below.

12. For violations of the provisions in Article 12a of the amended Decree No. 16/CP:

a/ The violations of the provisions at Point a, Clause 2; Points b and c, Clause 3, Article 12a, which lead to tax losses, shall be sanctioned as follows:

- Way of calculating tax difference and the application of fine levels:

The payable amount of tax on the actually imported goods volume minus the tax amount declared on the customs declaration by the goods owner is equal to the amount of evaded tax. The evaded tax amount shall include the export tax, import tax, value added tax and the special consumption tax. The tax difference shall be determined by the professional tax units.

After the evaded tax amount is calculated, it must be compared with Joint Circular No. 06/TTLN of September 20, 1996 of the Supreme People�s Procuracy, the Supreme People�s Court and the Ministry of the Interior guiding the handling of tax evasion, in order to sanction the violators according to tax laws or initiate a criminal case against him/her, depending on the evaded tax amount. If the administrative sanction is imposed, it must be based on Article 3, Clause 1 of Article 4, Decree No. 22/CP of April 17, 1996 of the Government stipulating sanctions against administrative violations in the field of tax, and Point 2, Part II, Circular No. 128/1998/TT-BTC of September 22, 1998 of the Ministry of Finance guiding the implementation of Decree No. 22/CP to impose a fine of from 1 to 5 times the evaded tax amount, depending on the nature and seriousness of the violation.

- The legal bases for issuing sanctioning decisions must conform with the following provisions of the tax laws:

+ Clause 3, Article 20 under Clause 5, Article 1 of the Law Amending and Supplementing a Number of Articles of the Law on Export Tax and Import Tax;

+ Clause 3, Article 19 of the Law on Value Added Tax;

+ Clause 3, Article 17 of the Law on Special Consumption Tax;

+ Decree No. 22/CP of April 17, 1996 of the Government stipulating sanctions against administrative violations in the field of tax.

Where there are not enough legal grounds to determine whether the acts of evading export tax, import tax, value added tax and/or special consumption tax (if any) are intentional or not, the sanctions shall comply with Clause 2 or Clause 3, Article 12a of the amended Decree No. 16/CP, depending on the nature and seriousness of the acts of violation.

b/ Where goods imported for investment capital contribution to joint ventures are declared with the values higher than their actual values and papers are counterfeited to increase the investment capital contribution, sanctions shall be imposed not only on act of falsely declaring the goods value but also on the act of counterfeiting papers; if signs of criminal offenses are detected, the case shall be transferred to the investigation bodies.

c/ Where the goods and articles appellations declared in Vietnamese are not accurate as compared to their English names on vouchers in the customs records and relevant technical documents ( if any) just due to translation errors, the accurate re-translation is requested and no sanction shall be imposed.

13. Regarding acts of violation relating to permits and permit substitute documents:

a/ Expired permits:

- For export goods: The goods owners shall have to apply for the extension before being allowed to carry out the export procedures, and at the same time be sanctioned according to the provisions in Clause 1, Article 14, Decree No. 01/CP on sanctions against administrative violations in the field of commerce.

- For import goods: If a permit is still valid by the time of signing the contract or loading the goods on board the transport means, but the permit or the contract expires when the goods reach the destination port, sanctions shall be imposed on act of using the expired permit to import goods, as prescribed in Clause 1, Article 14, Decree No. 01/CP on sanctions against administrative violations in the field of commerce; this case shall not be considered the illegal import.

b/ Where imported goods are not in line with the contents of the permits but the violation material evidences are supplies or machinery to be used as investment capital contribution to joint-ventures, which are of advanced technologies suitable to the use requirements and certified by the competent State management bodies and which have been declared with the customs authorities, sanctions shall not be imposed thereon, but all financial obligations must be fulfilled according to the provisions of law.

c/ Where imported goods are not in line with the customs declaration and the consignees refuse to take the goods and return them to the sellers with legitimate reasons and in compliance with the Commercial Law and other provisions of Vietnamese legislation as well as international trade practices and without any signs of legalization of smuggled goods lots, the sanctions shall comply with Clause 3, Article 12a, the amended Decree No. 16/CP, forcing the transportation of goods out of Vietnam.

Where goods and/or articles are exported or imported in accordance with the customs declarations (not being goods and articles banned from export/import) which the consignees refuse to take and return them to the sellers with legitimate reasons, in compliance with the agreement in the commercial contract, such goods and/or articles shall be allowed to be taken out of Vietnam and no sanction shall be imposed, but actuality must be thoroughly checked before permitting the implementation.

14. Where goods and/or articles are exported or imported incompatibly with the customs declarations, but without affecting the tax money and the financial obligations to be fulfilled, without violating regulations on goods item policies, environmental hygiene or technical criteria as prescribed by law, sanction shall not be imposed unless otherwise provided for by laws.

15. Violations of the provisions on the statute of management over goods processed for export as well as import goods and raw materials imported for the production of export goods shall be sanctioned according to the provisions in Clause 1 or Clause 2, Article 12c of the amended Decree No. 16/CP, depending on the nature and seriousness of the violations.

16. The provisions in Points e and f, Clause 5, Article 12a of the amended Decree No. 16/CP, shall not apply to cases where the goods and/or articles brought into Vietnam on the basis of commercial contracts, in conformity with the importers� business licenses which have been presented by the importers within the time-limit prescribed in Clause 1, Article 5 of the Customs Procedures, Supervisions and Fees Regulation issued together with Decree No. 16/1999/ND-CP. Where, as prescribed by law, a commercial contract can be signed only after the license is obtained but the importer is granted the license after the signing of the contract, the customs authority shall have to consult the licensing body and the People�s Procuracy before handling the case.

17. With regard to the provisions in Point d, Clause 8, Article 12a of the amended Decree No. 16/CP, the directors of the provincial Customs Departments shall have to fully and promptly report thereon so that the General Director of Customs may decide the release of goods or authorize the director(s) of the provincial Customs Department(s) to take charge of the goods release.

18. With regard to diplomatic officials, consular officials, who take advantage of the diplomatic privileges and immunities to carry out commercial activities beyond the scope of their main functions, committing administrative violations regarding the customs, before they are sanctioned, the diplomatic bodies should be consulted with.

Those who are not entitled to the diplomatic privileges and immunities but take advantage of the diplomatic privileges and immunities to evade the customs inspection with a view to illegally exporting or importing goods, to evade tax or counterfeit papers in order to import goods under the customs privilege and immunity criteria, but not seriously enough to be examined for penal liability, shall all be sanctioned according to the provisions in Point a, Clause 5, Article 12a of the amended Decree No. 16/CP.

19. Violations of the provisions on export and import of foreign exchange:

a/ All cases of false declaration of foreign exchange with an amount equivalent to 5,000,000 VNdong or more shall be sanctioned.

b/ Violations of the provisions in Clause 4, Article 13 of the amended Decree No. 16/CP with the falsely declared amount of foreign exchange being equivalent to 100,000,000 VNdong or more, if involving aggravating circumstances, shall be administratively sanctioned or examined for penal liability, depending on the nature and seriousness of the violations.

c/ Where foreign exchange are illegally exported or imported but deliberately concealed through sophisticated ways against the customs inspection so that the customs authority hardly discover them, apart from the pecuniary fine under Clauses 1, 2, 5 and 6 of Article 13 of the amended Decree No. 16/CP, the violation material evidences shall be confiscated for the public fund.

20. Violations of the regulations on export/import of Vietnamese currency:

a/ For violations of Clause 1, Article 14 of the amended Decree No. 16/CP without aggravating circumstances and the material evidence being under 10,000,000 VNdong, the sanctioning form of warning shall apply.

b/ For the violations of Clauses 1, 2 and 3 of Article 14, upon the exportation, a pecuniary fine shall be imposed and the exportation shall be suspended.

c/ For the violations of Clauses 1, 2 and 3 of Article 14, if being deliberately concealed to evade the customs inspection, a pecuniary fine shall be imposed and the material evidence as well as means of violation shall be confiscated for the public fund.

III. SANCTIONING COMPETENCE

1. The immediate leaders of customs officers, including leaders of the professional working teams of border gates and professional bureaus appointed by directors of the provincial Customs Departments; professional bureaus without teams being organized may exercise the sanctioning competence according to the provisions in Clause 1, Article 16 of the amended Decree No. 16/CP. The immediate superiors of leaders of the professional working teams, when issuing sanctioning decisions, shall have to inspect and request the strict observance of provisions of law by people under their management. Where a violator is a foreigner or the matters involve complicated circumstances, the case shall be forwarded to the immediate superior level for issuing the sanctioning decision.

2. The heads of the border-gate customs offices, the leaders of the Inspection Teams of the provincial Customs Departments and the leaders of the Inspection Teams of the Department for Investigation against Smuggling shall exercise the sanctioning competence according to Clause 2, Article 16 of the amended Decree No. 16/CP.

For decisions on fine of 2,000,000 VNdong and decisions on confiscation of violation material evidences or means valued at 5,000,000 VNdong or more, the above-mentioned competent persons shall have to send them to the directors of the provincial Customs Departments, the director of the Department for Investigation against Smuggling (particularly the decisions of the Inspection Team of the Department for Investigation against Smuggling) for further sending to the People�s Procuracy of the provinces or centrally-run cities where the provincial Customs Departments are headquartered.

For acts of violations subject to a fine of over 2,000,000 VN dong or the confiscation of material evidence valued at more than 20,000,000 VNdong, the heads of the border-gate customs offices and the heads of the Customs Inspection Teams of the provincial Customs Departments shall have to report them, transfer the dossiers and material evidences thereof to the directors of the provincial Customs Departments for issuing sanctioning decisions.

Cases which go beyond the sanctioning competence of the leader of the Inspection Team of the Department for Investigation against Smuggling shall be transferred to the directors of the Customs Departments of the provinces or centrally-run cities where the violations are detected and recorded in minutes, for issuing the sanctioning decisions.

Heads of the border-gate customs offices and leaders of the Customs Inspection Teams of the provincial Customs Departments or the Department for Investigation against Smuggling may impose sanctions according to tax laws with the maximum fine level of 20,000,000 VNdong.

3. The directors of the provincial Customs Departments shall exercise the sanctioning competence according to the provisions in Clause 3, Article 16 of the amended Decree No. 16/CP:

a/ For violations subject to a fine of over 20,000,000 VNdong, to carry out procedures for transferring the dossiers thereon to the People�s Committees of provinces or centrally-run cities (hereafter referred to as the provincial People�s Committees) where the violation material evidences and means are seized so that the presidents of the provincial People�s Committees shall issue sanctioning decisions. After the sanctioning decisions are issued, the directors of the provincial Customs Departments shall have to report the cases to the General Director of Customs.

b/ The dossiers on customs-related administrative violations, when being transferred to the provincial People�s Committee presidents, must be enclosed with the summaries of the cases and opinions of the directors of the provincial Customs Departments on handling measures. The procedures for handing over the dossiers on customs-related administrative violations subject to a fine of over 20,000,000 VNdong to the provincial People�s Committee must comply with the general regulations. The time-limit for consideration and settlement at each level is stipulated as follows:

Within 10 days after an administrative violation is recorded in minutes, the director of the provincial Customs Department shall have to send the dossiers thereon and the proposed handling measures to the provincial People�s Committee president for consideration and settlement. The violation material evidences shall still be kept at the customs warehouses for preservation. Particularly the material evidences being foreign exchange, precious metals and/or precious stones must be sealed and deposited into the State Treasuries.

c/ The sanctioning decisions against the administrative violations transferred by the customs authorities to the provincial People�s Committee presidents for settlement according to their competence, after being issued by the latter, shall be implemented by directors of the provincial Customs Departments where the administrative violations were accepted and processed. Monthly, the directors of the provincial Customs Departments shall have to report on the results of the implementation of the provincial People�s Committee presidents� sanctioning decisions against the administrative violations to the General Director of Customs.

d/ Where a provincial Customs Department takes charge of customs units located in other provinces, the administrative violations in which provinces where the material evidences and/or means are seized shall be transferred to the presidents of People�s Committees of such provinces for issuing the sanctioning decisions ( if the cases go beyond the sanctioning competence of the directors of the provincial Customs Departments).

e/ The provincial Customs Department directors� competence to sanction under the tax laws shall comply with the provisions of the tax laws and documents guiding the implementation thereof. For the evaded tax amounts below the level liable to the examination for penal liability as stipulated in joint Circular No. 06/TTLB of September 20, 1996 of the Supreme People�s Procuracy, the Supreme People�s Court and the Ministry of the Interior guiding the handling of tax evasions, the directors of the provincial Customs Departments may fine up to 5 times the evaded tax amount, but the maximum level of the fine of one time the evaded tax amount must be lower than 50 million VNdong or the maximum of the fine up to 5 times the evaded tax amount must be lower than 250 million VNdong.

For cases where the fine levels exceed the above-prescribed levels, the directors of the provincial Customs Departments shall issue decisions on sanctions under the tax laws only after obtaining the written consent of the People�s Procuracy of the same level. After issuing the sanctioning decisions, the provincial Customs Department directors shall have to report to the General Director of Customs thereon.

IV. APPLICATION OF MEASURES TO PREVENT ADMINISTRATIVE VIOLATIONS AND ENSURE SANCTIONS AGAINST ADMINISTRATIVE VIOLATIONS

1. When applying the measure of temporarily taking persons into custody according to the administrative procedures, the following principles must be strictly observed:

a/ Only persons with competence prescribed in Article 19 of the amended Decree No. 16/CP can temporarily take people into custody according to the administrative procedures.

b/ When taking a person in custody, there must be the written decision thereon, and a copy of which must be handed to the person in custody.

c/ People shall be taken into custody according to the administrative procedures only in case of necessity to gather and verify important details to serve as bases for deciding administrative sanctions or to prevent or immediately stop the administrative violations.

2. Temporary seizure of material evidences and means of administrative violations.

a/ The application of preventive measures of temporary seizure of material evidences and means of administrative violations must comply with the provisions in Article 20 of the amended Decree 16/CP; if a goods lot contains both goods and materials being violation material evidences and goods and articles which are not violation material evidences, only the goods and articles which are violation materials shall be seized. Where the commission of violation is not determined yet, only goods samples are kept. For the material evidences being foreign exchange of departing or arriving passengers, only the foreign exchange amount in excess of the level prescribed by the State Bank of Vietnam shall be temporarily seized. For the material evidences being raw materials for the production of processed goods, raw materials for the production of export goods, goods to be used for investment capital contribution to joint ventures, duty-free goods imported by ODA capital and goods deposited in bonded warehouses, which are all described in permits and/or contracts, only the samples thereof are kept, goods shall be released and these subjects shall be requested to make written commitments to implement the subsequent sanctioning decisions.

Where organizations or individuals fail to strictly comply with the provisions on the application of measure of temporary seizure of violation material evidences and means, thus causing material losses to goods owners, the provincial Customs Department directors or the heads of the units being the superiors of the persons who have issued the temporary seizure decisions or the authorized persons of the General Department of Customs shall have to settle the compensations for the material losses caused to the goods owners according to Articles 7, 8, 9, 10 and 11 of Decree No. 47 of May 3, 1997 stipulating the compensation for damage caused by State officials and employees or competent persons of judicial bodies. Then, determine the level of compensation for damage caused by individuals or persons competent to temporarily seize the violation material evidence and means, according to Articles 12, 13, 14, 15, 16, 17 and 18 of Decree No. 47/CP.

b/ Persons competent to put people into custody according to the administrative procedures may temporarily seize the violation material evidences and means according to the administrative procedures.

c/ Leaders of the professional working teams may temporarily seize the material evidences and means of administrative violations only in case of flagrans crimen, which will be dispersed or replaced to do away with all traces if the measure of temporary seizure is not applied. But within 24 hours after the temporary seizure, the persons who issued the temporary seizure decisions shall have to report this to their immediate superiors according to the provisions in Article 19 of the amended Decree No. 16/CP and obtain their written consents.

d/ To make the preventive measures against administrative violations timely and effective, the provincial Customs Department directors may authorize heads of the bureaus for Investigation against Smuggling to temporarily seize the material evidences and means of administrative violations on the case-by-case basis. The authorizer and the authorized shall have to take responsibility for their decisions.

3. Body search according to the administrative procedures

a/ The competence and order for body search according to the administrative procedures shall comply with the conditions prescribed in Article 21 of the amended Decree 16/CP.

b/ Customs officers on duty may conduct the body search according to the administrative procedures. Before the search, they must show their customs identity cards to the to be-searched persons; take responsibility before law for their decisions and immediately report such to leaders of their direct managing units.

4. Checking transport means, objects according to the administrative procedures.

a/ Customs officers on duty may check transport means and objects according to the administrative procedures, except for cases of Vietnamese and foreign sea vessels, aircraft and trains operating on international routes, where the decisions of the heads of border-gate customs offices or of equivalent level are required.

b/ The search of transport means and objects of subjects entitled to the diplomatic privileges and immunities as well as consular immunities must comply with the provisions of the international agreements which Vietnam has signed or acceded to and must be decided by the General Director of Customs.

Where there are grounds to confirm that the luggage of persons entitled to the diplomatic privileges and immunities or consular immunities, who are on exit or entry, contain objects not eligible for privileges, or contain objects of the categories banned from export or import or failing to comply with Vietnam�s quarantine regime, the search shall be carried out under decision of the General Director of Customs in the presence of the diplomatic personnel or their authorized representatives.

5. Searching the places where material evidences and means of administrative violations are allegedly concealed.

When deeming it necessary to search the places where material evidences and means of administrative violations are concealed within the customs-controlled areas, the customs authorities shall have to coordinate with the competent bodies to conduct the search according to the provisions in Article 44 of the Ordinance on Handling of Administrative Violations.

V. PROCEDURES FOR SANCTIONING ADMINISTRATIVE VIOLATIONS AND EXECUTING DECISIONS TO SANCTION ADMINISTRATIVE VIOLATIONS

1. When sanctioning an administrative violation in the field of State management over the customs in form of warning or fine of up to 20,000 VNdong, the violation shall not be recorded in minutes, but an on-spot sanction decision shall be issued.

2. Decisions on sanctioning administrative violations may inscribe the effective dates (like the case of sanctioning foreigners in absentia; or cases where, due to temporal or spatial conditions or other reasons, the decision contents cannot be fully executed within 5 days from the date of receiving the sanctioning decision).

3. For cases where the form of fine or fine plus confiscation of violation material evidence and means is applied and past the time-limit for enforcement of the sanctioning decision the involved party deliberately fails to pay the fine, the coercive enforcement shall be organized.

Pursuant to Point c, Clause 3, Article 30 of the Ordinance on Handling of Administrative Violations, the provincial Customs Department directors may apply form of coercive execution of the sanctioning decisions by means of suspending the customs procedures for export/import goods and/or articles and this measure shall be applied only after the coordination with agencies defined in Article 30 of the amended Decree No. 16/CP without applying other coercive measures.

VI. SETTLEMENT OF COMPLAINTS

Upon the receipt of the complaint settlement dossiers, the customs authorities shall have to base themselves on Articles 30, 31, 32, 36, 39, 43 and 46 of the Law on Complaints and Denunciations to consider the complaints in term of the time-limits, the statute of limitations and the competence to settle the complaints and relevant matters in order to decide whether to receive and process the cases or not.

1. Competence to settle complaints:

The persons competent to issue decisions to sanction or decisions to apply preventive measures against customs-related administrative violations shall have to settle first-time complaints.

Heads of the professional bureaus and heads of the border-gate customs offices shall settle second-time complaints about sanctioning decisions of leaders of the professional working teams.

Directors of the provincial Customs Departments or the director of the Department for Investigation against Smuggling shall be competent to settle second-time complaints about sanctioning decisions of the heads of border-gate customs offices, leaders of customs inspection teams, heads of the professional bureaus (in areas where teams are not established) or the decisions of the leader of the Inspection Team of the Department for Investigation against Smuggling.

The General Director of Customs is competent to settle second-time complaints about sanctioning decisions of directors of the provincial Customs Departments and the presidents of the provincial People�s Committees.

The State Inspector General is competent to settle complaints about the General Director of Customs�s decisions on settlement of complaints.

The Minister of Finance is competent to settle complaints about the General Director of Customs�s decisions on sanctions according to tax laws.

2. The time-limits for settling complaints

a/ Within 10 days after the receipt of the complaint documents, the complaint settlers shall have to process them for settlement and notify this in writing to the complainant; and, in case of refusal to process for settlement, to notify this in writing to the complainant, clearly stating the reasons therefor.

The time-limit for settling first-time complaints by competent customs authorities at all levels (complaint settlers) must not exceed 30 days after the receipt and processing for settlement (the date of recording in the processing book and notifying the complainant in writing). For a complicated case, the time limit for settlement of the complaint may be longer but shall not exceed 45 days after the receipt and processing. In deep-lying and remote areas difficult to access, the time-limit for settling the first-time complaint shall not exceed 45 days after the receipt and processing; for complicated cases and matters, such time limit may be longer but shall not exceed 60 days after the receipt and processing thereof for settlement.

In the course of settling complaints, if deeming that the execution of the complained sanctioning decision shall bring about insurmountable consequences, the complaint settler shall have to issue a decision or propose the immediate superior to issue the decision to suspend the execution of the sanctioning decision.

The suspension duration shall not exceed the remaining duration of the time-limit for settlement of the complaint. The suspension decision must be sent to the complainant and persons with involved rights and interests. When the reasons for the suspension are deemed no longer in existence, such suspension decision must be abrogated immediately.

b/ Within 10 days after receiving the complaints under their settling jurisdiction, the settlers of the second- or subsequent-time complaints shall have to receive and process them for settlement and inform the complainants thereof in writing.

The time-limit for settling the second-time or subsequent complaints by the complaint settlers shall not exceed 45 days after the complaints are received and processed for settlement. For complicated matters and cases, the above time-limit may be longer, but must not exceed 60 days. For deep-lying and remote areas which are difficult to access, the time-limit for settling the second- or subsequent-time complaints shall not exceed 60 days after they are received and processed for settlement; for complicated matters and cases, such time-limit may be longer, but must not exceed 70 days after they are received and processed for settlement.

3. The contents of a complaint-settling decision:

When settling complaints about decisions on sanctioning administrative violations, the complaint settlers shall have to base themselves on Article 38 (settlement of first-time complaints), Article 45 (settlement of second-time and subsequent complaints) of the Law on Complaints and Denunciations and the set printed form HC17 to issue decisions on settlement of the complaints.

Where a complainant disagrees with the decision on settling his/her first-time complaint, he/she may further lodge his/her complaint to the immediate superior level of the person who has issued the sanctioning decision or initiate an administrative lawsuit at court according to law.

The provincial Customs Departments and the Department for Investigation against Smuggling shall have to periodically report to the General Department of Customs according to set form on the complaints they have received, processed and settled.

VII. ORGANIZATION OF IMPLEMENTATION

1. The Legal Department of the General Department of Customs shall have to coordinate with concerned Departments and sections of the General Department of Customs in conducting review of decisions on sanctioning customs-related administrative violations and inspecting the observance of laws in the course of sanctioning so as to ensure that the sanctioning of customs-related administrative violations are carried out in accordance with the provisions of law.

2. The directors of the provincial Customs Departments shall organize the strict control of the observance of the principles and orders of sanctioning administrative violations (prescribed in the Ordinance on Handling of Administrative Violations and the Regulation on the Order of Sanctioning Administrative Violations in the Customs Service, promulgated together with Decision No. 97/TCHQ-PC of August 5, 1996 and Official Dispatch No. 2505/TCHQ-PC of August 6, 1996 guiding the implementation of the above Decision) by units under their respective management.

The border-gate units, the inspection teams of the provincial Customs Departments and the professional bureaus shall have to appoint officials to monitor, guide and inspect the sanctioning of administrative violations by professional working teams, and promptly settle complaints about administrative preventive measures and about decisions on sanctioning administrative violations according to the provisions of the amended 16/CP and the guidance in this Circular.

3. For the administrative violations or complaints about administrative violation-sanctioning decisions, which involve complicated circumstances, the Advisory Council for Settlement at all levels shall have to study and scrutinize them so as to propose the General Director of Customs and directors of provincial Customs Departments to promptly and properly issue decisions.

4. Officials monitoring and guiding the implementation of sanctioning of administrative violations must be selected from among officials and personnel, who are well tempered and tested, honest and knowledgeable about laws and professional operations.

5. The collection and payment of administrative violation fines shall comply with the guidance of the Ministry of Finance. The director of the Export/Import Tax Collection Control Department under the General Department of Customs shall have to inspect and guide in detail the collection and payment regime according to the current regulations.

6. Customs officials and personnel competent to sanction or to apply administrative preventive measures or tasked to carry out the sanctioning of customs-related administrative violations, if committing acts of violating the principles and order of sanctioning the administrative violations as prescribed by law or showing the lack of responsibility, harassing or seeking their own benefits, shall be strictly dealt with by law, depending on the seriousness of their violations; if causing material losses to individuals and/or organizations they shall have to compensate therefor according to law.

This Circular takes effect 15 days after its signing, and replaces Circular No. 05/1998/TT-TCHQ of August 29, 1998 and previous legal documents of the General Department of Customs which are contrary to this Circular.

General Director of Customs
PHAN VAN DINH